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Producer Cost
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Author:  ebergst [ Thu Feb 11, 2010 1:28 pm ]
Post subject:  Producer Cost


I am looking for a way to convert kWh consumed in a production process into the propoer EIOLCA database format. I have access to retail prices for 1997 but I think I need to convert this to producer cost. Any ideas on finding a factor to reduce retail cost to producer cost?

Author:  clweber [ Tue Apr 27, 2010 8:15 am ]
Post subject:  producer price of electricity

THanks for the question, it's a good one.
In general one must be sure to use prices that are equivalent to how producer prices are processed by the BEA in teh construction of the input-output tables. You can find in general how producer costs are tallied in the BEA's input-output book available on their website.
In the case of electricity there are no transportation costs or wholesale/retail margins that are easily calculable, and thus BEA uses the retail prices as a proxy of the producer prices. However, the crucial point is that one must use the average producer cost for the entire sector, which for electricity would be the average retail price to all sectors (residential, commercial, and industrial) since the sector supplies each of them, but with different unit costs. Thus, you have to perform a weighted average price calculation based on total kWh sold to each sector. For 2002 this comes out to something like 7.6 c/kWh after averaging.

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